Turkmen Gas Put up for Sale in New York
// Gurbanguly Berdymuhammed to hold talks with Condoleezza Rice
U.S. Secretary of State Condoleezza Rice is to meet with Turkmen President Gurbanguly Berdymuhammed in late September 2007, for the first time. During the president’s visit to New York, the Turkmen government and its state companies are to enter negotiations with U.S. energy and investment companies. The negotiators will primarily discuss opening Turkmenistan’s natural gas sector, where Russia, China, and Iran compete, for U.S. investors.
In late September 2007, U.S. Secretary of State Condoleezza Rice will for the first time meet with Turkmen President Gurbanguly Berdymuhammed. Their talks will pass in New York within the framework of the UN General Assembly’s session, in which the new Turkmen president will take part. The U.S. is getting ready for the meeting, where the discussion of Washington-Ashgabat political relations will open a serious dialog about U.S. investment into Turkmenistan’s energy sector. Berdymuhammed is to be accompanied by a large group of governmental officials, who have already arranged meetings with representatives of U.S. private companies in Houston and Washington.
In the nine months since the death of Turkmen President Saparmurat Niyazov, the U.S. has intensified its diplomatic activity in Ashgabat. Before 2007, the U.S. authorities had almost no contacts with Turkmenistan’s government. Due to Turkmenbashi’s personality cult and the serious human rights violations by Niyazov’s regime, noted by human rights organizations, the U.S. Department of State could not engage in official talks with Turkmenistan on any serious issues.
U.S. Assistant Secretary of State Richard Boucher was the first U.S. official to pave the way to the new Turkmen president, Berdymuhammed. Boucher attended Niyazov’s funeral in late December 2006. His visit to Ashgabat, during which he handed Condoleezza Rice’s letter to the new Turkmen president, made it possible for U.S. Department of State’s high-rank officials and US. Congressmen to visit the country on a monthly basis. While the latter were interested in the state of religious and civil freedom in Turkmenistan, U.S. diplomats mainly wanted to discuss possible economic cooperation. U.S. Principal Deputy Assistant Secretary of State for South and Central Asian Affairs Steven Mann has recently discussed the issue with Berdymuhammed, when Mann headed the delegation of U.S. Energy Department and Commerce Department to Turkmenistan.
The negotiations primarily concern Turkmenistan’s gas sector. The country is the third among former Soviet states and the 12th in the world by its confirmed natural gas deposits (nearly 3 trillion cubic meters). U.S. Deputy Assistant Secretary of State Evan Feigenbaum, who visited Turkmenistan twice this year, said at a meeting in the Carnegie Fund on Monday that Rice’s upcoming talks with Berdymuhammed will focus on whether U.S. oil-and-gas and investment companies may enter the Turkmen gas market.
A source close to the U.S. Department of State confirmed that the visit was preceded by consultations with a number of gas market expert companies, whose names are not disclosed. The meetings in the U.S. will be devoted to gas investments, and to U.S. aid to Turkmenistan in changing its economy management structure, in military and security spheres, in education and healthcare. However, the main Turkmen asset – natural gas deposits – will be the central issue of the talks.
At present, Russia’s Gazprom is Turkmenistan’s major partner on the gas market. According to the agreement of 2003, Russia is to receive from Turkmenistan up to 50 billion cubic meters of gas annually in the period between 2007 and 2009, and up to 80 billion cubic meters annually beginning from 2010. Meanwhile, U.S experts believe that the real supplies to Russia through the Central Asia—Center pipeline system did not exceed 30 billion cubic meters in 2005-2006. Analysts doubt that the Turkmen state data on gas supplies is true. Iran is the second largest buyer of Turkmen export gas. Under the contract of 1995, Turkmenistan is to supply 8 billion cubic meters of gas annually to Iran’s north, while the real sales make up around 5 billion cubic meters a year. Besides, Turkmenistan wants to finish building a new pipeline to China before 2009. It also plans to be supplying around 30 billion cubic meters annually to Pakistan through a new pipeline. Turkmenistan’s equity production of gas made up around 65 billion cubic meters in 2006, growing by over 12 percent. It is impossible to implement Turkmen gas export plans even partially without the foreign inflow of investments into gas extraction.
“The U.S. does not want to question the existing Russian contracts. We want to provide Turkmenistan with technologies for gas extraction and transportation,” underlined Feigenbaum in his speech. However, the source close to the U.S. Department of State said: “Anyway, someone will definitely stay at a loose end in the struggle for Turkmen gas.” The upcoming gas struggle also has a political component. Feigenbaum said that “Russia’s self-assertion in the region is the first of the nine points explaining why Central Asia is important for the U.S.”. China and Iran are second and third reasons accordingly.
It is obvious the talks in the U.S. will not be easy. “It will be hard for the U.S. to compete with Moscow and Beijing in Ashgabat, because we insist on respecting human rights and civil freedom, while Russia and China easily get along without mentioning these issues,” said a U.S. expert on Central Asia. He said that the U.S. so far has no levers of pressure on Turkmenistan, but explained that “they will appear when Berdymuhammed begins wishing to receive international recognition”.
Thus, the bargain for Turkmen gas might be useful for both parties. Investments into developing the Turkmen gas deposits might become a U.S. lever of pressure in the region. For Berdymuhammed, the talks with the U.S. might give ground to his regime’s international legitimization. In that respect, the situation with Turkmenistan has hardly changed since December 2006. Moreover, Turkmenistan might begin solving its own political goals during Berdymuhammed’s visit to New York. The U.S. is ready to offer help to Turkmenistan in solving the issue of the Caspian territorial waters and shelf’s carve-up. However, the U.S. is not ready to help solve similar difficulties in Turkmen relations with Iran and Russia.
So far, there has been no information on whether the Trans-Caspian Pipeline project will be reanimated in the U.S. or not. The long-distance pipeline with a submarine section along the Caspian seabed would have allowed Turkmenistan to export gas to Europe detouring Russia, Uzbekistan, and Kazakhstan. Instead, it would have been through Azerbaijan, Georgia, and Turkey. Back in May 2007, Russia and Kazakhstan (Turkmenistan’s two major foreign trade partners) undertook an attempt to establish relations with Berdymuhammed. Presidents Vladimir Putin and Nursultan Nazarbaev held talks with their Turkmen counterpart both in Turkmenistan and in Kazakhstan. They offered the Caspian Shore Pipeline project as an alternative to the Trans-Caspian one. The Caspian Shore Pipeline would have allowed Turkmenistan to expand gas export to Europe by means of Gazprom’s pipeline systems. However, Ashgabat took a time-out in those talks. Perhaps, it wants to hear U.S. offers as well. They will be presented to Berdymuhammed after his meeting with Rice.
The date of the Turkmen president’s visit to New York will become known soon. Kommersant is watching the course of events.
Dmitry Sidorov, Washington; Dmitry Butrin
All the Article in Russian as of Sep. 20, 2007
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